Industrial demand is responsible for as much as 71% of silver’s total production needs, driven by its crucial role in renewable energy technologies such as solar panels.
“Silver supply may enter a shortage before the end of this year and increase thereafter,” said Rhona O’Connell, head of market analysis at StoneX, pointing to tighter supply dynamics as a key driver of price appreciation.
The demand for fuels from the industrial renaissance
Unlike gold, which serves primarily as a store of value, silver’s dual function as a precious metal and as an industrial necessity has uniquely positioned it in the marketplace. Data from
The Silver Institute points to successive market shortages over the past two years, and this trend is expected to continue into 2024. Supply constraints in key mining regions such as Mexico and rising demand for electrification are further tightening the market.
“As the fundamentals for silver and copper are increasingly driven by electrification demand and the energy transition, we are seeing increasing correlation patterns between silver and copper,” said Sprott, a Canadian precious metals investor.
Investment opportunities and prospects
Silver offers a variety of investment options, from silver-backed ETFs and physical bullion to shares in mining and streaming companies. Analysts at Scotiabank highlight the metal’s dual role, making it an attractive option for portfolios seeking exposure to both industrial growth and precious metals.